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Using financing to drive improvements in health care quality

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This chapter examines the financing and organisation of the Korean health care system and whether it is driving improvements in the quality of care. Korea's national health insurance faces a difficult budgetary environment as it grapples with rapidly rising health care costs, in large part driven by a very competitive hospital sector that is underpinned by fee‐for‐service financing rewarding the over‐supply of medical services. It is argued that Korea ought to use its single insurer to more explicitly drive quality across the health care system. This should begin by shifting to financing hospitals through diagnostic‐related groups (DRGs) to reduce the over‐provision of services per patient. More broadly, stronger budgetary controls on hospital expenditure should be used to shift the balance of funding towards primary care over time. In this context, Korea's unique pay for performance programme has demonstrated the capacity to extract valuable information to assess the quality of care. Future reform should seek to build on this by incorporating assessments of quality of care into financing.

Document Type: Review Article

Publication date: 2012-03-01

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